PFM Health Sector Development Program Bangladesh PRMM Learning Event June 18, 2015

Transcription

1 PFM Health Sector Development Program Bangladesh PRMM Learning Event June 18, 2015 Suraiya Zannath Sr. Financial Management Specialist Dhaka Bangladesh :

2 HSDP: An Overview A US$ 7.7 billion program Pooled resources -US$ 700 million Pooling partners : IDA, DFID, Cida (DFATD), Sida, AusAid (DFAT), KfW, UNFPA, USAID Implementation through 32 Line Directorates under the Ministry of Health and Family Welfare (MOHFW) Third SWAp since Already achieved two of the three HNP MDGs and received United Nations MDG Award 2010 for its achievement of MDG 4. Objectives: Improving Health Services: The delivery of essential health services- reproductive, adolescent, maternal, neonatal, infant and child health and family planning (FP), nutrition, communicable and non-communicable diseases etc. Strengthening Health Systems: Governance, stewardship, sector planning, human resources, health care financing, quality of health care, pharmaceuticals. 2

3 PFM- Risks and Challenges ü Procurement intensive sector, but highly centralized with no contract management capacity ü Planning and Budgeting process well defined at the central level but lack local level planning and service delivery focus ü Expenditure framework and service delivery milestones are delinked ü PFM and Procurement function- Predominantly a doctors sector; organizational structure in spending units and staffing do not support effective FM and procurement functions ü Budget holders are doctors who are driven by spending allocated budget but lack capacity on expenditure management ü Accountability in a multi tiered structure and sanctions for corrupt practice are not defined, not practiced at any levels within Health institutions despite a service centric sector ü Critical risk flags specific to health sector are not defined; Fire fighting approach, not preventive or deterrent ü Management information system (MIS) is not comprehensive, not used for monitoring financial, physical progress or health financing plan or strategy. HNP GP Management: [Presentation]/ [Notes], day/mo/year 3

4 PFM- Risks and Challenges ü Transparency in decision making or Information disclosure practically non-existent ü Asset and Store management ( Medical equipment, goods, drugs) -acquisition, distribution, utilization, maintenance, repair and disposal lack modern technique, not tracked systematically ü Complaint or grievance handling system exist on limited scale for procurement, not for service delivery Oversight function: Internal Weak Budget and expenditure monitoring by Health Ministry over the LDs Ineffective Internal Audit ; General resistance to IA Oversight : External Audit approach and methodology follow general compliance audit, not specialized or strategic to health programs Long haul audit follow up process at both ends reduces audit usefulness Performance audit is limited, not focused on service delivery HNP GP Management: [Presentation]/ [Notes], day/mo/year 4

5 Broader issues and challenges The institutional arrangements for service delivery in the health sector are inherently complex, (varying nature of services and institutions involved), yet system not built focusing service delivery or health outcome PFM is viewed as general transaction processing tool; Link & benefits between PFM interventions and health sector service delivery results not established, not even understood by the policy makers Lack of Tone at the Top or corporate face, despite commercial pattern of service oriented health institutions Elite capture, political pressure and influence are rampant HNP GP Management: [Presentation]/ [Notes], day/mo/year 5

6 How risks / Challenges impacts Expenditure Management HNP GP Management: [Presentation]/ [Notes], day/mo/year 6

7 How risks / Challenges impacts Expenditure Management HNP GP Management: [Presentation]/ [Notes], day/mo/year 7

8 How risks / Challenges impacts Expenditure Management The pie chart gives an overview of the audit observations by five categories 43% of the audit observations relate to financial management, 22% relates to assets management, 18% relates to procurement, 15% relates to management issues of the Line Directors as well as the Cost Centres. HNP GP Management: [Presentation]/ [Notes], day/mo/year 8

9 How risks / Challenges impacts Expenditure Management The chart shows the audit observations, categorized under three risks rating (high, medium and low). Overall 34% observations fall under high risk category, 57% fall under medium risk category and rest fall under low risk category HNP GP Management: [Presentation]/ [Notes], day/mo/year 9

10 How risks / Challenges impacts Expenditure Management Pattern of High risk audit observations: Inadequate or incomplete record keeping that made ex-post verification difficult Non-submission of auditable or documentary evidence Payment based on fictitious bills or purpose ( Workshop, training and conferences) Withdrawal or cash payments by false statements Sale of procured drugs in open market Unutilized medical equipment Split of expenditure to avoid competition Payment to officials bank account instead of vendors/third parties. Procured goods/equipment not delivered or delivered in different quantities or specification Poor quality or sub-standard goods, works HNP GP Management: [Presentation]/ [Notes], day/mo/year 10

11 How risks / Challenges impacts Expenditure Management (Procurement) HNP GP Management: [Presentation]/ [Notes], day/mo/year 11

12 How Risk/challenges Impacts- Service delivery Abuses and maltreatment of patient by health providers, long waiting time, unkind behavior by physicians, high cost of care and illegal charges Unhygienic environment, poor construction work and no system for waste management Some high value medical equipment remained un-used due to lack of proper technician. In case of non- medical equipment, there is no maintenance cost in the budgetary allocation, as a result those equipment remained unutilized There is no effective mechanism or system in place for users to get redress. Citizens cannot register complaints; grievance redress process at the ministry level is not compliant with the government policy and hence is not effective or efficient Misuse and mismanagement of resources at the hospital, district and Upazilla levels, no system in place for investigation and timely action No efficient and effective drug storage, monitoring of expiry dates and distribution system HNP GP Management: [Presentation]/ [Notes], day/mo/year 12

13 Tackling the risk and challenges: critical PFM arrangements Additional surveillance- Post procurement Audit, In-depth FM Reviews, Integrated procurement Audit, Performance audit- HIV and NGOs All now combined into one consolidated annual review- Integrated Fiduciary Review ( Proc, FM and Technical). Use of Treasury system with combination of govt procedures Outsourced internal Audit Function to private auditor Outsourced FM function in LDs to private accounting firm A one stop FM unit in the MOH with professional staff/ or consultants support FM handbook covering ad-hoc circular and sector specific policy and procedures Audit Committee, FM task force. Robust Management Information System, capable of producing timely report Assets Management system on pilot basis Synchronization of MTBF and Operational Plans. Health sector specific Audit Strategy Performance, compliance and financial HNP GP Management: [Presentation]/ [Notes], day/mo/year 13

14 Going Forward- linking PFM with service delivery Continuation of Additional fiduciary safeguard arrangement; periodic integrated fiduciary assessment as basis to adjust risk mitigation action plan, such as integrated fiduciary review using forensic technique and methodology by an independent firm More frequent internal audit instead of annual. Revamp Complaint Handling Arrangements- In order to ensure a strengthened, credible, effective complaint handling system and appropriate disclosure and awareness of the system. A comprehensive Operational Handbook, specific to Health Sector covering red flags (tension points), risk, sanctions Establish FM units/strengthening budget management wings across the LDs. Introduce FM for Non Finance training program MIS to track physical, financial and service delivery interfacing IFMIS Broaden scope of annual audit and timely settlement A robust and modern Asset Management system Legal and regulatory framework to allow competition, waste management Market Survey of Pharmaceutical Industry E-Government -procurement Civil Society or third party Monitoring Explore Public Private collaboration and outsource selected activities to private firm Install Incentives for Change and better expenditure management leading to improved service delivery HNP GP Management: [Presentation]/ [Notes], day/mo/year 14

15 THANK YOU HNP GP Management: [Presentation]/ [Notes], day/mo/year 15